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Victim or the Crime: Dubious Industry Claims about EPA Health Protections

Theo Spencer

Posted December 15, 2010

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 A recent report by the Brattle Group paints a bleak picture of the impact of impeding Environmental Protection Agency public health regulation updates on the nation’s power sector. The report’s conclusions are along the lines of other, industry-funded studies, which have been challenged in many quarters.


What the Brattle Report and others like fail to account for is the vast public health benefits of continuing to protect the air we breathe and the water we drink. A report last year from the National Academy of Sciences found that, using 2005 data, the health impacts from coal-fired power plant emissions of sulfur dioxide (SO2), nitrogen oxides (NOx) and fine particulate matter (PM) were about $62 billion a year. Another report from the Clean Air Task Force using more recent EPA data found that annual health impacts from these same pollutants cause $100 billion in health impacts.


The Brattle report states that pollution control costs and plant shutdowns will be concentrated in certain regions of the country, particularly the Midwest, and the Northeast. Not surprisingly, the adverse health impacts caused by these power plants will also be concentrated in these regions, as the map on page 11 of the Clean Air Task Force report.


In a June 2010 Regulatory Impact Analysis, EPA found that the proposed Clean Air Transport Rule to control power plant emissions (SO2, NOx and PM) largely from the Midwest will “yield more than $120 to $290 billion in annual health and welfare benefits in 2014, including the value of avoiding 14,000 to 36,000 premature deaths….[which] far outweighs the estimated annual costs of $2.8 billion.” The proposed new standards are designed to fulfill the CAA’s “Good Neighbor Rule”, which prohibits upwind regions from polluting downwind regions.


Additionally, a new report by Charles Chichetti, a senior advisor to Navigant Consulting, looks at EPA’s analysis of the Transport Rule and finds that even EPA’s  “staggering numbers substantially understate the adverse regional impacts of interstate pollution transfer as they fail to consider the resulting economic inequities and losses suffered by downwind states, in particular higher labor and health insurance costs, lost jobs, lost state and local tax revenue, and higher gasoline prices.”


The Chicetti study also takes on industry arguments that installing pollution controls required by the Transport Rule will be overly financially burdensome to local economies, and utilities and their customers, concluding:


  • implementing the Transport Rule will stimulate the economies, increase employment and tax revenue, and hasten economic recovery in downwind areas. Under any reasonable set of assumptions, the Transport Rule benefits far outweigh compliance costs; each dollar invested in necessary pollution controls avoids $50-100 dollars in downwind costs annually.”


  • “Under highly probable conditions, refining EPA’s estimates would likely mean the Transport Rule benefits exceed compliance costs by about 100 times.”


Though emissions of other pollutants from power plants, such as cancer-causing toxics like mercury and dioxin, also have massive public health implications, their health impacts have not been widely quantified as EPA uses SO2, NOx and PM as a proxy for these emissions in their health analysis.


The Brattle Group report and industry would have us believe that the EPA under the Obama Administration is rashly and randomly issuing a thicket of new regulations that have no precedent or basis for their timing. The truth is that all power plant-related regulations and regulatory updates are mandated by legislation and the courts. Schedules for implementing these regulations and their updates have been widely known for years, as a host of utility company executives pointed out in a recent letter to the Wall Street Journal:


“The electric sector has known that these rules were coming. Many companies, including ours, have already invested in modern air-pollution control technologies and cleaner and more efficient power plants. For over a decade, companies have recognized that the industry would need to install controls to comply with the act's air toxicity requirements, and the technology exists to cost effectively control such emissions, including mercury and acid gases.”




“Contrary to the claims that the EPA's agenda will have negative economic consequences, our companies' experience complying with air quality regulations demonstrates that regulations can yield important economic benefits, including job creation, while maintaining reliability.” (see full text of letter below).


Overall, the Clean Air Act, signed into law by Richard Nixon in 1970 and Amended by George H. W. Bush in 1990, has done a very effective job in its 40 year history of protecting the air we breathe without damaging the economy.



  • The environmental technology industry—spurred by environmental regulations and particularly the Clean Air Act—created 1.3 million total jobs between 1977 and 1991. Exports of environmental and pollution control technologies grew by 130 percent between 1993 and 2003, and were valued at $30 billion in 2004. 


Along the way it’s also made some pretty impressive gains in public health. In fact, the Clean Air Act’s public health and economic benefits are among the nation’s most powerful legislative success stories. 


  • Between 1970 and 1990, the Clean Air Act prevented 205,000 premature deaths; 21,000 cases of heart disease and 843,000 asthma attacks (to name a few benefits.)



  • Since 1980, we have reduced lead levels in the air by 92 percent lower, greatly reducing the number of children with impaired intelligence.





Most Americans want the EPA to keep on doing that job, according to a September 2010 Infogroup/ORC survey which found that “[m]ore than four out of five Americans (82 percent) support the work of the U.S. Environmental Protection Agency, with 45 percent supporting it strongly compared to only 9 percent who strongly oppose it.”


Below are short summaries of the main pollution control also standards also coming down the pipeline



Goal: Tighten health standards for smog pollution to protective levels.

Health Benefits: Save as many as 12,000 lives per year, prevent thousands of heart attacks, tens of thousands of asthma attacks and emergency room visits, and hundreds of thousands of lost work-days.

Formal rule name: Reconsideration of the 2008 Ozone National Ambient Air Quality Standards.

Timeline: EPA is expected to finalize the new smog standards by the Summer of 2011.


Tens of millions of Americans live in areas where the air quality is frequently unhealthy to breathe due to smog. As a result, the EPA’s Science Advisory Board has unanimously recommended that the EPA tighten the standards in order to adequately protect public health.


According to the EPA, tightening the standard will prevent or avoid the following health impacts each year:

-          As many as 12,000 premature deaths;

-          58,000 asthma attacks;

-          21,000 hospital and emergency room visits;

-          5,300 heart attacks;

-          Over 2.1 million missed school days; and

-          420,000 lost work days.


As the EPA explains:


Scientific evidence indicates that adverse public health effects occur following exposure to ozone, particularly in children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases. Ozone exposure also has been associated with increased susceptibility to respiratory infections, medication use, doctor visits, and emergency department visits and hospital admissions for individuals with lung disease. Ozone exposure also increases the risk of premature death from heart or lung disease. Children are at increased risk from exposure to ozone because their lungs are still developing and they are more likely to be active outdoors, which increases their exposure.



Goal: Establish standards to reduce toxic air pollution from thousands of power plants.

Health Benefits: Save as many as 8,000-10,000 lives per year, prevent respiratory and cardiovascular disease, reduce lost work-days, and reduce the exposure of children to mercury and lead.

Timeline: EPA is expected to finalize the standards in November 2011, with compliance required no later than January 2015.

Formal rule name (anticipated): National Emission Standards for Hazardous Air Pollutants for Major Sources: Electric Generating Units.



Goal: Establish standards to reduce global warming pollution from power plants.

Reduce deaths and illnesses from heat waves, air pollution, infectious diseases and extreme weather events.

Timeline: EPA may begin the regulatory process in 2011, focusing on power plants (standards for other industrial sources would follow in separate processes.)

Formal rule name: Since the process has not officially begun there is not yet a formal rule name.


Under the Clean Air Act, the pollution that causes global warming must be treated like any other air pollution.


Global Warming Health Effects:

As the EPA has noted:  … “(T)here are four main categories of health effects:


  • Increased frequency, duration, and intensity of heat waves. The associated health problems of heat cramps, heat exhaustion, and heat stroke will be become increasingly common. The very old and very young are especially vulnerable, as well as those who are poor, socially isolated or who have chronic illnesses.


  • Increased air pollution. Increased temperatures cause increased production of ground level ozone, the main component of smog. This will increase rates of asthma and other respiratory diseases. It also makes breathing difficult for those who already have cardiac or respiratory ailments. Pollen production and allergies are also increasing as a result of increased CO2 concentrations.


  • Infectious diseases. Climate change is altering the range of disease-carrying organisms. West Nile virus carried by mosquitoes was not as prevalent in the United States until recently. More than 25,000 cases and more than 1,000 deaths have been recorded.


  • Extreme weather events. This includes severe storms, increases in both drought and flooding, and associated features such as erosion and wild fires. The commenter indicates that we simply do not have the public health capacity to respond to increasing numbers of large-scale disasters that are difficult to predict. “


Recently, 136 national and state organizations and experts signed a letter to Congress stating that “"The U.S. Environmental Protection Agency is responsible for protecting the public's health from climate change, and we urge you to fully support the EPA in fulfilling its responsibilities.”




The Wall Street Journal   (12/08/2010)

We're OK With the EPA's New Air-Quality Regulations


Your editorial "The EPA Permitorium" (Nov. 22) mischaracterizes the EPA's air-quality regulations. These are required under the Clean Air Act, which a bipartisan Congress and a Republican president amended in 1990, and many are in response to court orders requiring the EPA to fix regulations that courts ruled invalid.


The electric sector has known that these rules were coming. Many companies, including ours, have already invested in modern air-pollution control technologies and cleaner and more efficient power plants. For over a decade, companies have recognized that the industry would need to install controls to comply with the act's air toxicity requirements, and the technology exists to cost effectively control such emissions, including mercury and acid gases. The EPA is now under a court deadline to finalize that rule before the end of 2011 because of the previous delays.


To suggest that plants are retiring because of the EPA's regulations fails to recognize that lower power prices and depressed demand are the primary retirement drivers. The units retiring are generally small, old and inefficient. These retirements are long overdue.


Contrary to the claims that the EPA's agenda will have negative economic consequences, our companies' experience complying with air quality regulations demonstrates that regulations can yield important economic benefits, including job creation, while maintaining reliability.


The time to make greater use of existing modern units and to further modernize our nation's generating fleet is now. Our companies are committed to ensuring the EPA develops and implements the regulations consistent with the act's requirements.


Peter Darbee, chairman,president and CEO,PG&E Corp.; Jack Fusco, president and CEO, Calpine Corp.; Lewis Hay, chairman and CEO, NextEra Energy, Inc.; Ralph Izzo, chairman, president and CEO, Public Service Enterprise Group, Inc.; Thomas King, president, National Grid USA,; John Rowe, chairman and CEO, Exelon Corp.; Mayo Shattuck, chairman, president and CEO, Constellation Energy Group; Larry Weis, general manager, Austin Energy


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Frank GravesDec 16 2010 10:43 AM

I am one of the co-authors of the recent Brattle report, wondering how you reached your interpretation of our analysis. Above, you describe it as reaching conclusions that the EPA has "rashly and randomly" imposed new regulations, when in fact we make no statement whatsoever about the heritage or merits of these regulations as environmental protection. Likewise, we never comment as to whether the costs exceed the benefits or vice versa. In fact, the majority of our report focuses on the amount of coal plant closures these policies are likely to induce, rather than on the costs of compliance by those who choose to retrofit. We also point out the CO2 displacement benefits. The whole report is directed at how the policies' implementation will alter operational conditions in the electric industry and its upstream fuel markets, and none of it is directed at evaluating the net social benefits of the policy. Most of these impacts are precisely what the policies were intended to achieve, so in one way our report gives a measure of the likely effectiveness of the new regulations. NB, we also clearly distinguish the impact of recent lower power prices from the impact of the new regulations as drivers of the plant closures.

I understand that blogging is not journalism, but a more measured treatment of our report and of this issue would increase the credibility and usefulness of your website.

Theo SpencerDec 16 2010 11:56 AM

Dear Mr. Graves,

Below are some sentences I picked from the report to highlight the points I made in my earlier email to you. Indeed some of my reactions to these statements could be sense as ‘interpretive’, but I believe some of the language you use is overly dramatic. This is illustrated by the image of the Stop Sign with “EPA” written on it on page/slide 3. There is little mention of the reason for these regulations. EPA regs are not “highly tilted towards command-and-control,” instead they are in place to protect public health. Even if your report is read only by a financial audience the choice of words imparts a bias, and lacks overall context for the purpose of the regulations. In terms of the coal ash and water (316b) rules, there is wide speculation that these rules will be delayed/there timelines extended. In particular, many believe that the flexibility implied in the 316b rules will make them relatively easy to comply with.

There is also no mention of the postponement of Boiler MACT rules or Ozone NAAQS standards. This fails to present a larger sense of context. Finally, we believe and are producing the modeling to show (through some of the other vendors you cite in the report) that there will not be (meaningful) reliability and price impacts.

For better or worse, the report only serves what we believe to be incorrect claims of a coming “train wreck) due to EPA public health protections.

That’s just my take.


Theo Spencer

Emerging EPA regulations on air quality, water use and ash disposal will likely require existing coal units to
choose between installing expensive control equipment and retirement.

Image of Big Stop Sign that says “EPA”

The nature of most of these regulations, and the way states must implement these more stringent air quality standards, is highly tilted
toward command-and-control, less toward cap-and-trade of emission allowances that are fungible over space and time.

Command-and-control regulations affect the cost of new resources; perhaps more importantly, they force older, less compliant power
plants to make a decision: invest in (expensive) controls or retire.

HAPs are pollutants (mercury, phosphoric acid, lead and selenium compounds, etc.) that are associated cancer or other serious health affects

EPA is expected to issue rules in 2011/12 regarding cooling water intake structures and waste water discharges.

Electric reliability (grid and reserves) at risk

Increase in electricity prices (energy and capacity)

EPA mandate would result in 275 TWh (16%) decrease in U.S. coal generation in 2020.

Comments are closed for this post.


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